Economic methods for producing modest quantities of renewable chemicals have been sought for years. The production of renewable chemicals would enable the U.S. to become more sustainable, but the present production costs are too high. The question is largely one of scale. The costs could be lowered if the products were made at a large scale. But the present markets are too small to justify the investment in a large-scale plant.
The situation is different for renewable fuels. The United States has made the deployment of systems and facilities to generate renewable fuels and chemicals a major priority. The Energy Independence and Security Act of 2007 (EISA) calls for the U.S. to produce 24 billion gallons (ethanol equivalent) of renewable fuel by 2017. The U.S. Environmental Protection Agency (EPA) has proposed lowering that amount to 18.8 billion gallons, because technological advances are required to produce the additional 5.2 billion gallons of renewable fuel. The situation could be even worse in 2022, when the EISA has set 36 billion gallons of renewable fuel as the production target. Stepping up the production of cellulosic ethanol cannot fill this gap because the “blend wall” (the maximum ethanol concentration allowed in fuel for gasoline-burning combustion engines) has already been reached. In this regard, ethanol is at the blend maximum of 10 parts ethanol to 90 parts gasoline to remain suitable for use in combustion engines, and there are no practical alternatives to ethanol at present. No other existing commercial scale technology can fill the gap. New technological solutions are therefore needed.
The economics associated with the production of renewable fuel are also favorable. The EISA set up a trading system for Renewable Identification Number (RIN) certificates, where one RIN is awarded for each gallon of “ethanol equivalent” fuel produced. If one produces renewable gasoline, then each gallon of gasoline would be awarded 1.56 RINs. “D3” RINs currently sell for about $2.70/gallon. California has a related low carbon fuel certificate (LCFS), by which the producer is awarded one LCFS certificate for each metric ton (MT) of CO2 that is converted into fuel. A California LCFS certificate currently sell for $70. Calculations indicate that the sales of certificates from a 150 megawatt (MW) electrolyzer-based renewable gasoline plant would generate over $42,000,000 of revenue ($1.63/gal), thereby lowering the net cost of producing gasoline using the present system.
The net effect is the cost to produce renewable fuels approaching economic viability.
Missing at present is a way to take advantage of the growing market for renewable fuels to also produce renewable chemicals. For example, it is possible to imagine constructing a large plant that can produce either renewable fuels or renewable chemicals. In that way, the plant could serve two markets, so the cost of the plant construction could be divided over the two markets. Such a large-scale plant does not exist today, but if it could be built, it would serve the renewable fuel market and would also lower the cost of the renewable chemicals, to help that market develop.